The Emerging Role of APTA in Forging Asia-Pacific Integration. Presentation Structure

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1 The Emerging Role of APTA in Forging Asia-Pacific Integration Training on Trade Defence Measures and Other Trade Related Issues Trade Training Institute, Yangon 4-5 September 2014 Trade and Investment Division Presentation Structure Part I Overview of RTAs in Asia and the Pacific Presenter: Joong-Wan Cho, Chief, APTA Secretariat, TID/UNESCAP Part II Overview of APTA Role of APTA in Promoting Trade and Regional Integration Potential Benefits for Myanmar Accession Procedure Presenter:Joong-Wan Cho, Chief, APTA Secretariat, TID/UNESCAP Part III Market Access: Results of the Fourth Round Concessions under APTA Recent Developments on Rules of Origin (RoO), Including APTA RoO Presenter: Rajan Sudesh Ratna, Economic Affairs Officer, TID/UNESCAP 1

2 Part I Overview of RTAs in Asia and the Pacific RTAs: Economic Rationale The provision for Regional Trade Agreements was built as exception to the WTO rule on Most Favored Nation; but now they are changing the global landscape. RTAs were seen as a building block a stepping stone towards economic liberalization at multilateral level for: A desire to obtain more secure, quick and preferential access to major markets. Liberalising the economy with limited trade partners to test their waters. Ultimately taking the multilateral route of economic liberalisation and thereby exposing firms and countries to seek efficiency through larger markets, increased competition, and access to foreign technologies and investment. 2

3 Benefits of RTAs Positive effects: bigger the membership in the RTA with deeper and wider commitments for integration. Indirect effects: economic and industrial restructuring; wider economic cooperation. Increased bargaining power in WTO and other forum,even though trade interests of all RTA members may not be the same. Benefits for LDCs, Small Island countries; Land-locked countries for trading with neighboring countries. Forge political alliances under the present geo-political situation. RTAs notified to GATT/WTO (1948~2014) Source: WTO Secretariat. 3

4 Global RTA Landscape NAFTA EUROPEAN UNION EFTA PAFTA ECOWAS EAC SAFTA CACM CARICOM CEFTA GCC CEMAC SADC ASEAN CAN MERCOSUR CIS WAEMU COMESA SACU PICTA RTAs in Asia and the Pacific Free trade agreements Free trade agreements and Economic Integration agreements Custom union Other Bilateral Plurilateral Coutry bloc Source: APTIR (2013) based on data from APTIAD. 4

5 Asia and the Pacific: Cumulative RTAs ( ) Developing-developing Developed-developing Developed-developed Source: ESCAP calculation, based on data from Asia Pacific Trade and Investment Database(APTIAD). Asia-Pacific Spaghetti Bowl Source: ESCAP calculation, based on data from APTIAD. 5

6 Is consolidation of RTAs Possible? APTA: Bridge to other RTAs SAFTA AFTA APTA ECOTA PICTA AFTA: ASEAN Free Trade Area (Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam) SAFTA: South Asian Free Trade Area (Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka, Bangladesh, Afghanistan) ECOTA: Economic Cooperation Organization Trade Agreement (Afghanistan, Azerbaijan, Iran, Kazakhstan, Pakistan, Tajikistan, Turkey, Turkmenistan, Uzbekistan, Kyrgyzstan) PICTA: Pacific Islands Countries Trade Agreement (Cook Island, Fiji, Kiribati, Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Vanuatu) 6

7 Consolidation of RTAs in Asia-Pacific Source: Growing Together, ESCAP, 2012 Part II Overview of APTA : History Role of APTA in Promoting Trade and Regional Integration Potential Benefits for Myanmar APTA : Accession Procedure 7

8 Overview of APTA : History The oldest preferential trade agreement among developing countries in the Asia Pacific. (Predecessor: The Bangkok Agreement), signed in China joined in 2001, providing fresh momentum. Renamed as the Asia Pacific Trade Agreement (APTA) in Current members include Bangladesh, China, India, Lao PDR, Republic of Korea and Sri Lanka. Mongolia will become the 7 th member of APTA during the fourth (4 th ) session of APTA Ministerial Council scheduled for last quarter of Overview of APTA: History (Cont d) Other important features of APTA include: i) The only operational RTA linking China and India, two locomotives of economic growth with a consumer base of 2.6 billion people. Both showed higher growth in imports from Asia Pacific during the recent global economic crisis; ii) Special and differential treatment for LDC members; iii) No membership fee, open to all UNESCAP developing member countries. 8

9 Myanmar Export 2003~2013 (million USD) , ,491 8, ,524 6,042 6, ,628 4,910 4, ,735 3, , ,100 1,329 1,827 1,973 2,336 3,402 2, Bangladesh China India Korea, Rep. Sri Lanka Mongolia APTA World 0 Source: ESCAP calculation, based on UN Comtrade data downloaded from WITS database and APTIAD Myanmar Import 2003~2013 (million USD) ,399 15,305 18, , ,644 2,974 3,074 3,312 1,173 1,217 1,175 1,458 4,691 5,976 2,164 2,465 6,156 2,887 4,235 5,953 7,532 8, Bangladesh China India Korea, Rep. Sri Lanka APTA World Source: ESCAP calculation, based on UN Comtrade data downloaded from WITS database and APTIAD 0 9

10 APTA : New Areas of Cooperation The Role of APTA in Promoting Trade and Regional Integration The only truly region-wide trading arrangement; Open membership with huge market potential; Bridge to other RTAs; Simple and operational; WTO consistent; New momentum since the Goa meeting in 2007; the recent conclusion of the 4 th Round; and ratification of the APTA Framework Agreements on TF, Investment, and Services Trade, respectively. Big Potential for Economic Integration in Asia-Pacific 10

11 APTA: Bridge to other RTAs RTAs/FTAs of APTA Member Countries Country PTAs/Bilteral FTAs Signed Entered into Force APTA Bangladesh GSTD SAFTA APTA ASEAN CHILE COSTA RICA China HONG KONG, China MACAO, China NEW ZEALAND PAKISTAN PERU THAILAND APTA ASEAN GSTD SAFTA PTN AFGHANISTAN BHUTAN India CHILE JAPAN Rep. of KOREA MALAYSIA MERCOSUR NEPAL SINGAPORE SRI LANKA

12 RTAs/FTAs of APTA Member Countries (cont d) Country Partner Signed Entered into Force APTA ASEAN GSTD PTN CHILE Republic of Korea EFTA EU PERU SINGAPORE TURKEY US APTA ASEAN Laos ASEAN-AUSTRALIA-NEW ZEALAND THAILAND US APTA Sri Lanka GSTD SAFTA Mongolia APTA Technical Assistance under APTA UNESCAP/APTA Secretariat provides technical assistance to the countries desiring to accede to APTA through: i) Providing assistance to and commissioning research ii) studies; Organizing capacity building programs; iii) Support member countries in preparing their national concession list; iv) Assist in organizing national/subregional workshops. 12

13 APTA : Accession Procedure The applicant country notifies the Executive Secretary of UNESCAP of its intention to accede to the Agreement. ES informs the applicant country s intention for accession to the APTA members, and the APTA Secretariat prepares a negotiation programme for the members approval. Bilateral negotiations Multilateralization of agreed concessions The Agreement comes into force for a newly acceded country on the date it deposits the corresponding instrument of accession accompanied by the National List of Concessions and the related administrative notification (e.g., Government notification such as a customs notification) to the Executive Secretary of UNESCAP. Part III Market Access: Results of the Fourth Round Concessions under APTA Recent Developments on Rules of Origin (RoO), including the APTA RoO 13

14 Market Access: Results of the Fourth Round Concessions under APTA Results of the Fourth Round: Deeping and Widening of Concessions Before 4th Round After 4th Round of products under concession 4,270 (587) 10,548 (1,151) MoP (%) 26.8 (58.8) 31.7 (89.74) Notes: (1) Numbers in the brackets indicate special concessions for the LDCs. (2) Margin of Preference (MoP) is the percentage of applied MFN tariff to be exempted, estimated as a simple average of all the items under concession. The Fourth Round, launched in October 2007, led to tariff concessions over 10,000 items, compares to 4,270 items under the Third Round Scheduled in force by the Fourth Ministerial Council meeting, this Round widens the coverage of preference of total tariff lines for each member state and deepens the tariff concessions by at least per cent of total intra-regional trade under APTA Recent Developments on Rules of Origin: APTA A. General Rule (agreed earlier): 45% for Developing Participating States 35% for Least Developed Participating States B. Co-equal Rule (Agreed at 34th SC meeting yet to implement): CTH + 35% for Developing Participating States LDCs: under discussion C. Product Specific Rules: 1,057 items at 6 digit HS 14

15 Recent Developments on Rules of Origin: APTA HS 2007 Description MFN( %) A model of Multilateral RoOs dataset India Lao PDR RoOs MOP(4th, MOP for MFN( MOP(4th,% General General %) LDC %) ) RoO for RoO for developing LDC PSs PSs Horses % 35% Asses % 35% Other % 35% Horses for polo % 35% Asses, Mules and % 35% hinnies livestock Other % 35% Bulls, adult % 35% Cows, adult % 35% Buffaloes, adult % 35% and calves Other % 35% Bulls, adult % 35% Buffaloes, adults % 35% and calves Other % 35% NOTES: (1) PSR: Product Specific Rules of Origin. (2) Excluding Sri Lanka s concession list. PSR 16 Recent Developments on Rules of Origin: APTA (cont d) A Model of NTMs Dataset China HS 2007 Description SPS objective Doc link Milk & cream in solid forms of 1.5% fat Announcement of the Regulation on Management of Sanitary Certificate of Import of Dairy Products The purpose of the notified regulation is to unified regulate the management of import of dairy products, and ensure the quality and safety of import of dairy products. Animal health Food safety Human health Transmissible Spongiform Encephalopathy (TSE) Animal diseases Zoonosis TBT objective Doc link Dairy machinery Circular of the State Tobacco Monopoly Food safety Administration on Modifying Human health Requirement for Tar Limit in Cigarette Mainstream Smoke Labeled on Packages (1 page, in Chinese) It is decided that all cigarettes produced after 1 January 2011, with tar content in the mainstream of smoke labeled on packages of cigarettes more than 12mg/piece, are not allowed to be sold on the domestic market. This decision applies to imported cigarettes equally. docs docs NOTES: (1) SPS/TBT based on WTO I TIP database. (2) Under APTA 4 th Round concession

16 Thank You! APTA official website: escap-apta@un.org 16

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